PRS Across the Borders
August 13, 2012
In Scotland and Wales, consultations have been taking place looking at the whether the growing Private Rented Sector should be regulated. The English government has, as yet, not taken similar steps. There have been calls from some corners but as of yet the Government is focusing on how to attract more investment with in the PRS with the Montague Review. The Governments Housing Minister, Grant Shapps, clearly stated Westminster’s thoughts towards greater regulation in an exchange of correspondence with Justice Secretary, Kenneth Clarke when he said, “Overall, I believe that improvements [in the PRS] should be driven by a more proactive approach from professionals in the leasehold sector, not by greater regulation, and expect landlords and managing agents to obey the law and act in a socially-responsible manner.”
Shapp’s views are echoed by Ken Clarke, who pointed out the impact that further regulation could have on the PRS; “In the past over-regulation drove landlords out of the rental market. The last Government wanted to introduce a National Register of Landlords, regulation of letting and managing agents, and compulsory written tenancy agreements. These plans would have restricted supply, increased rent levels and reduced choice for tenants.”
The Welsh Government consultation on ‘Proposals for a Better Private Rented Sector in Wales’ is an attempt to streamline the PRS legislation within Wales. It is proposing to introduce legislation that will compel private landlords, letting agents, and managing agents to obtain registration and licensing.
The requirement for registration is not dependent on whether an owner has a large portfolio of properties, or simply one. All owners of private rented accommodation must register. Though it is noted that there will need to be exemptions from these requirements to register for some classes of landlord, such as those who own establishments that are let for holiday purposes.
In Scotland the Assembly’s vision for housing is that all people in Scotland should be able live in well maintained homes that meet their needs and affordably. They have recognised the significant role PRS housing is playing in providing the populace with flexible housing options and following the commitment they made in ‘Homes Fit for the 21st Century’, the Scottish Government is looking to create a PRS that provides accommodation that meets a high standard in terms of physical condition and also the level of management that tenants receive.
Over the past few months Government bodies have been working in partnership with the Scottish Private Rented Sector Strategy Group to develop a consultation to seek out the views from those involved within the PRS. The consultation, which is currently ongoing, wants to discover how the Government can work together with the various organisations involved within the PRS to help the sector flourish. The Scottish Government hopes that the consultation will provide a clear picture about the role it can play in making the PRS a more attractive housing option for a wider range of residents.
If Wales and Scotland continute to take steps towards regulating their respective private rented sectors, it will be interesting to see how Westminster responds to the question of PRS regulation. Housing minister Grant Shapps argues against interference in the PRS, claiming it could force landlords to sell up, restrict the market and push the cost of rent higher. The question that needs to be answered is whether regulation is the right step forward?